Why FIRE is no mental health panacea

It’s widely appreciated that financial woes negatively impact the mind, not just the bank balance.

“It is difficult to disentangle the inter-relationship between debt and mental health, but the links are clear” (Mind)

Causality may be murky, but the association is not. Financial turmoil is stressful, detrimental to one’s mental health and indeed even fatal. Take the suicide of an American teenager, who mistakenly believed he was over half a million pounds in debt, as an example. The global financial crisis is further evidence of the lethality of financial stress, leaving a ~5% increase in suicides across European and American countries in its wake1.

The mechanism through which finance is injurious to mental health is crystal clear; debt is firmly in the driving seat2, 3. The more debt, the worse the effect on health4. Those with debt are more likely to suffer mental distress and people with mental health disorders are more likely to be in debt5. It’s a vicious downwards spiral, a negative vortex. It is all too clear how debt can act as a lead weight around the ankles, a heavy burden on shoulders and mind.

It’s no wonder that the task of clearing debt is near the top of every personal finance guide, flowchart or how-to.

Silver bullet

When I first started learning about optimising one’s personal finance, it was readily clear how beneficial it could be for people’s mental health, not just their net worth. As debt is the major player, taking it out of the game would have positive consequences. The stress of debt would be eliminated, replaced by the psychological enrichment of seeing your bank balance in the black. Releasing the mental shackles imposed by debt could also have a synergistic effect on wellbeing beyond the purely financial.

Further down the road from ‘mere’ optimisation of your personal finances, debt clearance, saving money etc., lies financial independence, an end-of-the-spectrum modus operandi that could be an even greater boost for one’s mental health. You’re achieving a financial nirvana. An income optional, ‘set for life’ state. Debt and money worries can be off the table entirely. To double down on the monetary benefits from FI(RE), the absolution from a working life could take away a whole other sphere of psychiatric detriment.

Yes, when I first started reading about the FI(RE) movement I was convinced that both the journey to, and arrival at, financial independence would be a significant shot in the arm for one’s psychology.

The scales have tipped too far

Contrary to my hypothesis, I started to notice a theme amongst the FI literature. There in plain sight was a veritable DSM-5 of negative cognition about finance. Anxiety, low mood, depression, addiction, fear, guilt, neurosis.

The perhaps appropriately named blog Fretful Finance was one of the first to open up. In their post entitled “Do you have a grey dog?” they described their depressive episodes. Although their site is now down, from recollection it appeared that FI(RE) was neither protective against nor curative of their dysthymic periods. It may have even been contributory.

Following this came the Ninja, with a frank piece of introspection in which he self-diagnoses an ‘allergy’ to spending money. The disagreeableness of expenditure ran deeper than mere hypersensitivity, however, as he described a slew of negative emotional states associated with (not) spending money. Envy. Anxiety. Hatred. Fear.

Perhaps most worrying was the transition from the psychological to the physical:

“When experiencing this allergy to spending, it’s not just a preference that I prefer to choose. It’s actually a feeling deep down in my gut, I feel physically sick. “

‘Not buying things’ was heroin. Without it, there was physical withdrawal.

HITG describes a similar array of psychological issues associated with being too work-focussed on the path to FI. Sleepless nights, feeling overwhelmed, obsessing and a degree of self-neglect were all present before she made changes.

GFF joined the conversation, with the astute observation that strict command of the purse strings mimicked symptoms of that disease of control: anorexia. I won’t re-hash his analysis of under-spending/over-frugality, save to copy the most poignant quote: “It’s no way to live your life!”

In the dark corner

Blogging heavyweight The Accumulator entered the ring with their broader view of the mental health pitfalls on the FI(RE) ‘slog’. They describe the mental health punches you can expect the ‘financial demons’ to throw during the twelve rounds to FI, and how one might avoid them.

Acknowledging the indelible marks left by their own journey to financial independence via ‘personal hell’, TA proposes techniques to duck the uppercut of the bottle, swerve the jab of drugs, and counter the haymaker of anhedonia.

Yet victory by knockout and claiming the FI(RE) belt is no guarantee that the mental health issues are behind you. The listless lethargy of purposelessness can be just as psychologically detrimental as the overbearing pressure of work, as this recent post demonstrates. I’m sure that even with activity abound there are significant sources of stress post-FI; worrying that your investments will lose value, that your maths is wrong, that you’ll run out of money, that the unexpected will happen, that the unknown unknowns will sabotage your plans.

What to do?

It’s become clear to me, both from my own FI(RE) journey to date and learning from others, that aiming for financial independence is no mental health panacea. Although it is perhaps not as malignant as indebtedness, FI is certainly not psychiatrically benign. What’s the best way forward then?

I won’t pretend to have the perfect answer for everyone nor even myself. As the prophet Brian preaches: “You don’t need to follow me. You don’t need to follow anybody. You’ve got to think for yourselves. You’re all individuals”.

What I am aiming for is a middle ground. A balance between stringent asceticism and indulgent profligacy. What my grandparents might describe as “everything in moderation, including moderation itself”. The Buddhist middle way.

Enough saving to keep the journey to FI(RE) on track. Enough to keep alight the flame of early retirement, which is certainly psychologically protective against the darker moments of working life. Eschewing ‘kept-up-with-Jones-ism’, seeking value and quality.

Yet also enough spending to enjoy life, to promote my wellbeing, happiness and joy. A burger and a beer with my friends, for example. Or the immeasurable benefit of ad-free music. Simple gifts, as it were.

I’m still finding that balance. I doubt there’ll ever be a concrete number that lies at the inflection of the too-much vs. too-little curve. I suspect my spending/saving will indefinitely oscillate around some ideal value. I do know that 2020/21’s 60%+ savings rate was too much, so I’m resolved to spend more this year (yes, you read such heresy on a FI blog).

Whatever you choose to do, remember to look after yourself.


Mr. MedFI


  1. Impact of 2008 global economic crisis on suicide: time trend study in 54 countries. Chang, S-S et al. BMJ (2013); 347
  2. Debt, income and mental disorder in the general population. Jenkins, R et al. Psychological Medicine (2008); 38, 10: 1458-1493
  3. The relationship between personal debt and mental health: a systematic review. Fitch, C et al. Mental Health Review Journal (2011); 16(4), 153-166.
  4. The relationship between personal unsecured debt and mental and physical health: A systematic review and meta-analysis. Richardson, T et al. Clin Psychol Rev. (2013); Sep 10;33(8): 1148-1162.
  5. The Social and Economic Circumstances of Adults with Mental Disorders, Stationary Office, London (2002)

8 thoughts on “Why FIRE is no mental health panacea

  1. Life is suffering as someone once said… I have observed zero correlation between net worth and overall mental wellbeing in myself or those around me.

    My recent, unplanned foray into the RE part of FIRE has been hugely damaging psychologically, undoubtedly left me in a worse state than I was previously.

    The good life is much more than a large bank balance and an absence of work


    1. Hope that you’re on the mend Rhino! I concur – the good life probably comes with a moderate balance and the presence of some meaningful pursuit.


  2. What you’ve written makes a lot of sense. Doing anything good requires a lot of sacrifice. And especially if you compound the sacrifice during the pandemic, a lot of mental health has declined, including myself.

    This decline in mental health is why I plan to take a sabbatical and a break from making money online. Before the pandemic, I didn’t really care about online income. But after the pandemic, I figured if I’m gonna be locked down, I might as well do some business.

    The other struggle you might have is quitting the money. It’s like a never ending moving target that one has to stop looking at.

    Thanks for sharing the thoughts of others on this subject as well.



    1. Shifting goalposts is definitely a one-way ticket to self-deprecation, and feelings of inadequacy and failure. Probably better to not set a target (that may be fairly arbitrary) at all!


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